1/2-month closing low and was well below its 200-day moving average, which it pierced last week.
Data on Thursday showed new claims for unemployment benefits surged last week, while factory activity in the mid-Atlantic region unexpectedly shrank in November as the economy felt the effects of superstorm Sandy.
A flare-up in violence in the Middle East added to market unease as Israeli warplanes bombed targets in and around Gaza city for a second day, while two rockets fired from the Gaza Strip targeted Tel Aviv.
Apple Inc shares dragged the Nasdaq lower, falling 2.1 percent to $525.62 and down about 25 percent since September's high.
Also in the tech sector, shares of Dell Inc fell in after-hours trading after it reported revenue that was shy of Wall Street's expectations. Dell was down 2.2 percent at $9.35.
Target Corp bucked the trend, rising 1.7 percent to $62.44 after it reported a profit that beat expectations.
Volume was roughly 7.26 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT, topping the year-to-date average daily closing volume of around 6.5 billion.
Decliners outnumbered advancers on the NYSE by 2,069 to 975 on the New York Stock Exchange. Decliners also had the upper hand on the Nasdaq, outpacing advancers 1,506 to 948.